问答题
A & D Ltd. provides you with the following information for the two years ended 31 December years 2002 and 2003.
{{U}}Balance Sheet ended at 31 December{{/U}}
2002 2003
＄'000 ＄'000
Plant and machinery 1,346 1,838
Less: Depreciation (224) (337)
Stock 234 346
Trade debtors 432 540
Bank and cash 60 414
Trade creditors (192) (216)
Accrued expenses (20) —
Taxation (80) (90)
Dividends {{U}}(45){{/U}} {{U}}(60){{/U}}
1,511 2,435
Less: 7% Debentures {{U}}(350){{/U}} {{U}}(1,000){{/U}}
Paid-up share capital 900 1,000
Share premium — 100
Revenue reserves 85 120
Profit and loss {{U}}176{{/U}} {{U}}215{{/U}}
{{U}}Trading and Profit and Loss Account{{/U}}
2002 2003
＄'000 ＄'000
Turnover 2,775 3,254
Less: Cost of sales {{U}}(1,816){{/U}} {{U}}(2,245){{/U}}
Gross profit 959 1,009
Less: Operating expenses (763) (765)
Profit before taxation 196 244
Less: taxation {{U}}(80){{/U}} {{U}}(90){{/U}}
Profit after taxation 116 154
Less: transfer to reserves (20) (35)
proposed dividends {{U}}(45){{/U}} {{U}}(80){{/U}}
Retained earnings for the year 
Paid-up share capital 900 1,000
Share premium — 100
Revenue reserves 85 120
Profit and loss {{U}}176{{/U}} {{U}}215{{/U}}
{{U}}Trading and Profit and Loss Account{{/U}}
2002 2003
＄'000 ＄'000
Turnover 2,775 3,254
Less: Cost of sales {{U}}(1,816){{/U}} {{U}}(2,245){{/U}}
Gross profit 959 1,009
Less: Operating expenses (763) (765)
Profit before taxation 196 244
Less: taxation {{U}}(80){{/U}} {{U}}(90){{/U}}
Profit after taxation 116 154
Less: transfer to reserves (20) (35)
proposed dividends {{U}}(45){{/U}} {{U}}(80){{/U}}
Retained earnings for the year
【正确答案】
【答案解析】(a) The purposes of preparing a cash flow statement include:
(i) Evaluate the liquidity and solvency of an enterprise.
(ii) Assess the enterprise's ability to generate cash from internal sources, to repay debt, to make investment, and to make distributions to owners.
(b) A & D Ltd.
Cash Flow Statement for the year ended 31 December 2003
＄'000 ＄'000
Net cash flow from Operating Activity 261
Returns on investments and servicing of finance:
—Interest paid (70)
—Dividends paid (65) (135)
Tax paid (80)
Investing Activities:
—Payments to acquire fixed assets (Workings 1) (554)
—Receipts for sales of fixed assets 12 (542)
Financing:
Issue of ordinary shares 200
Sales of debentures 650 850
Increase in cash and cash equivalent 354
Cash and cash equivalent, 1 January
Cash and cash equivalent, 31 December 414
Reconciliation of Operating Profit to Net Cash Inflow from Cperating Activity
＄'000
Operating profit (244+7%×1,000) 314
Depreciation (Workings 2) 150.2
Loss on disposal of fixed assets (Workings 3) 12.8
Increase in stock (112)
Increase in debtors (108)
Increase in creditors 24
Decrease in accrued expenses (20)
261
